G.O.Ms.No.41, Chennai Metro Rail Project Phase-I Subordinate Debt, 2016
The Government of Tamil Nadu, through the Planning, Development and Special Initiatives (SI) Department, issued G.O.Ms.No.41 dated 28 March 2016, sanctioning Rs.412.00 crores as additional subordinate debt to Chennai Metro Rail Limited. The interest free loan funds land costs and Rehabilitation and Resettlement expenses for Phase-I of the Chennai Metro Rail Project during 2015-2016, and does not itself identify affected properties or determine individual compensation.
What the government sanctioned
The Planning, Development and Special Initiatives (SI) Department issued G.O.Ms.No.41 dated 28 March 2016 to sanction Rs.412.00 crores as subordinate debt to Chennai Metro Rail Limited. The money is intended to meet land costs and Rehabilitation and Resettlement expenses for Phase-I of the Chennai Metro Rail Project during 2015-2016.
The sanction followed Chennai Metro Rail Limited's report that it had incurred Rs.1,800.93 crores against an allocation of Rs.1,533.22 crores. Chennai Metro Rail Limited reported a shortfall of Rs.267.71 crores and stated that Rs.490.86 crores was payable because of enhanced compensation awarded by courts. Of that amount, Rs.25.30 crores had already been deposited with courts.
How the funding works
G.O.Ms.No.41 provides the following financial arrangements:
- Rs.412.00 crores is sanctioned as an interest free loan to Chennai Metro Rail Limited.
- The amount is not paid in cash. It is credited by adjustment to the Public Deposit Account of Chennai Metro Rail Limited.
- The sanction was valid up to 31 March 2016.
- The repayment period is 10 years.
- Repayment is to be made semi annually.
- The moratorium continues until repayment of the Japan International Co-operation Agency loan is over.
- Repayment is to commence in 2043 or whenever the senior debt is repaid, whichever is earlier.
- Penal interest and recovery of interest do not arise because the loan is interest free.
The document states that necessary provision was made in the Budget Estimate for 2015-2016.
Who may be affected
G.O.Ms.No.41 directly affects Chennai Metro Rail Limited as the borrower and the Managing Director of Chennai Metro Rail Limited as the controlling authority. It also concerns government departments responsible for releasing, accounting for and recording the loan.
Property owners and people undergoing rehabilitation or resettlement may be indirectly affected because the sanctioned funds cover land costs, enhanced land compensation and Rehabilitation and Resettlement expenditure connected with Phase-I. G.O.Ms.No.41 does not list individual land parcels, name affected owners, acquire land, or state the compensation payable to any particular person.
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Common questions
Does G.O.Ms.No.41 acquire my property for the Chennai Metro Rail Project?
G.O.Ms.No.41 sanctions funding for land costs and Rehabilitation and Resettlement expenses. It does not list properties or acquire any identified parcel.
Does the document fix how much compensation a landowner will receive?
No individual compensation amount is fixed. The document records that enhanced compensation had been awarded by courts and provides additional funding for land and Rehabilitation and Resettlement costs.
Who receives the Rs.412.00 crores?
Chennai Metro Rail Limited is the borrower. The amount is credited by adjustment to its Public Deposit Account rather than paid in cash.
Is the subordinate debt interest bearing?
No. The annexure describes it as an interest free loan, so penal interest and recovery of interest do not arise.
